So you say you’re in debt. Not just in debt, but so far deep in debt that you barely know which way is up anymore, and it’s getting harder and harder to tread water. So why don’t you start taking steps to get out of credit card debt and clean up your credit?
With a mountain of debt staring you in the face, the task of cutting it down to size can seem insurmountable if you don’t even know where to begin. Luckily, all hope isn’t entirely lost in your efforts at credit clean up. Below are 5 simple steps you can take to start your road to credit repair and debt relief.
1.Pull a copy of your credit report. You can order a free copy of your credit report from annualcreditreport.com. This is the only site online that allows you a completely free copy of your report once every 12 months, so pull one up if you don’t have already. Once you have it, scour the report for any sign of inaccurate information that shows up. If anything on the report looks wrong to you, from account balances to personal information, notify the credit bureaus the accounts report to, and make sure they make the necessary changes to your report.
2.Look up your credit score. The next thing you’ll want to do is get a look at your actual credit score. Seeing your credit score will give you a good idea of how much work you’ll have to do. Unfortunately, there’s no free way (yet) to check your score online, however you can check myFICO.com for a peek at your credit numbers for $15. Just be sure not to sign up for their monthly watch program, unless you want updates on your credit score every 30 days.
3.Start using your old credit cards. If you have more than 3 open credit card accounts in your name, start taking stock of which ones you use, and those you may not need anymore. Since the length of your credit history makes up 15% of your overall credit score, according to FICO, you may want to hold onto your older cards so you can keep them reporting in good standing and keep your score from falling any lower because you closed the wrong cards.
4.Weigh your rewards options. Are you actually using those credit card rewards? If not, start checking your cards’ reward and rebate options and see if you’re eligible for any. You can also use each card’s reward options to decide which ones you want to keep open, and which would best be left untouched.
5.Seek professional help. If you’re still feeling overwhelmed by the process, or you just don’t have the time to deal with it all on your own, consider consulting a credit repair firm. I know it can be tricky to separate the real deals from the scams, so look for companies that stay away from making high financial promises and instead work to help you pay down your existing debts so you can start fresh.